Idol worship: Weaning ourselves off the God of Growth

Far from being a positive and progressive force for good, economic growth is driving our planet’s destruction, explains Dirk Campbell. The big challenge now is being collectively willing to jettison a system we’ve been told is key to our personal and collective prosperity.

‘The things that you’re li’ble
To read in the Bible
It ain’t necessarily so.’
— Ira Gershwin, Porgy and Bess

The Apocalypse (Revelation) of St John the Divine is the final book in the New Testament. The hell-on-earth scenes described by John of Patmos have come to be associated with the title of his book. Lakes of fire, plague, famine, death – prescient stuff bearing in mind the frightening scenarios we currently face, though he was a little off with his timing and there are probably no horsemen involved.

But he was right that there is a driving force behind the current onrushing planetary nightmare. Not the Devil, we don’t really do him anymore. Not, as some probably do suspect, an old-boys network of politicians and CEOs trashing the planet so they can buy their own island in the Caribbean. No, far more obvious than any of that. Plain to see, participated in by all, accepted as normal, desirable and even essential.

The force behind the climate and ecological crisis has this in common with the book of Revelation: like religious doctrine, it only exists on faith. Yuval Noah Harari in his book Sapiens explains that our human ability to believe in abstractions – things that don’t exist in reality – is what has made us the most successful species on earth. (This ‘success’ comes at some cost, not least because in many cases the imaginary ideas we have developed enable a few people to control and manipulate the majority.)

What am I talking about? Why, the economy, of course! A human-designed construct with no autonomous existence, believed in, revered, obeyed and pampered like some gigantic tamagotchi. What? Surely I can’t mean the freedom-loving global market economy that’s so beneficial and efficient everyone everywhere is adopting it, and that lifts people out of poverty and develops the global south?¹ Yes, that’s the one I mean. Let me try and explain.

Economic theory is couched in impenetrable jargon and swathed in baffling mathematical equations but it’s really just about money, and money is pretty simple. Money is actually a form of debt. Money means I provide you with this service or supply this good, and you don’t actually have to repay me in kind. You just give me a ‘debt token’ which I can hand on to someone else if they do the same for me.² So far, no problem – as long as relative market size doesn’t change. Then along comes Adam Smith in the 18th century and proves that markets don’t have to be static: they can expand if certain measures are applied, thereby increasing the overall money supply. He never says markets can or should expand indefinitely, in fact he says the opposite. But today’s mainstream economists insist that markets not only can but must grow indefinitely, because if they stop growing the whole system collapses. Governments agree, because politicians don’t understand economics and they don’t like the idea of markets collapsing. The result is that growth continues exponentially, and so do greenhouse gas emissions, environmental damage, resource exploitation and global impoverishment.

Conventional wisdom says you shouldn’t get into debt. But mainstream economics teaches that debt is good because it’s essential to growth. Businesses have to borrow in order to invest in the assets that enable them to grow and compete. You can grow by ploughing your profits back into your company if you’re a small business operating out of your garage,³ but most large businesses can’t do that. They have to borrow in order to grow, and they have to grow in order to keep pace with their interest repayments, and they have to prove that they can grow enough in order to attract the investment in the first place. Because investment is a risk, interest on commercial debt is high, so it’s the businesses that can grow that attract the money, and on the whole it’s the businesses that extract free natural resources which grow the fastest, do the most damage and are the most profitable.

Environmental activists are currently targeting the financial sector as the chief culprit in this heinousness, which it isn’t. True, the banks are acting immorally by investing in fossil fuel extraction and environmentally-damaging industries but they aren’t doing anything wrong according to market economics. In fact, CEOs of public limited companies are generally still expected to optimise “shareholder value” by any permitted means – and can quickly find themselves voted out by said shareholders if they don’t. Whatever resources can be found and exploited for profit, they are entitled to find and exploit. There is currently no law explicitly requiring companies to put the interests of biodiversity or future generations before their own profitability. Few businesses can afford to adopt environmentally conscious practices that place them at a competitive disadvantage. Business leaders aware of this have actually called for stricter regulation from governments,⁴ but governments are not complying. Why not? Are they afraid of upsetting someone? Are they incompetent to understand the relationship between economic activity and environmental destruction? Or is it perhaps their blind faith in economic growth? Whatever the reason, absence of proper regulation ensures the deepening of the environmental catastrophe day by day.⁵

Neoclassical or mainstream economic theory has no concerns outside of supply and demand. As Schumacher pointed out in 1973 (Small is Beautiful), resources have no economic value until they enter the market. A miner doesn’t ‘buy’ the diamonds he removes from the earth any more than a logger ‘buys’ the trees he removes from the rainforest. Economic theory factors in extraction, not conservation. When a particular resource is used up, some other resource can supposedly be substituted. Conventional economic theory takes no account of ‘externalities’ – that is, unintended impacts such as pollution, extinction or global warming. When these things are noticed by economists they call them ‘market failures’. Markets can’t prevent or correct their own failures. Markets exist solely to satisfy demand and ensure supply, and that’s it. Their failures are not, in that sense, their fault.

I think most people, even if they don’t know that the onrushing apocalypse is a major market failure, would agree that it’s a bad thing and that we should identify and correct the primary cause of it. If we do that, the secondary causes – banks, businesses, investment funds and economic doctrines – will have to change tack. Let’s say all market externalities (such as soil erosion, pollution, CO₂ emissions and the disappearance of ecosystem services such as plant pollination by insects or natural nutrient recycling) were to be internalised, that is to say costed into economic equations, we would immediately have sustainable economics.

We don’t at the moment because economics is not structured that way. Is this the fault of economists? Not really – they’re only seeing the world as they’ve been taught to see it. Are governments at fault then? Well, to a degree, but they can’t be blamed for not redesigning economic theory! Despite the clear urgency of action on climate change, governments won’t tie the hands of business because economists tell them that prosperity depends on growth, and that’s what politicians mostly tell their electorates.

So if the markets are not at fault, and economists are not at fault, and governments are not at fault — who then is the real culprit in all of this? What éminence grise is gleefully turning the handle of the mill grinding out global disaster?

Answer: nobody. That’s right. There’s nobody behind the curtain. Let me borrow again from holy writ, this time Old Testament invective against graven images. The economic growth model is an idol: a construct fashioned out of accumulated assumptions based on partial understanding. It has millions of devotees, none of whom attribute its defects to the idol; on the contrary, they call for its cult to be observed even more rigorously. The solution to the disastrous effects of growth is, yes: more growth. Something will have to be done about these devotees. Perhaps a course of de-programming. But the first task, surely, is to smash the idol and ban the cult.⁶

Satish Kumar, editor of Resurgence, visited Lewes in 2013 to publicise his latest book. Those who were at his talk may remember him saying, ‘We in India have a religious practice called “reciting the mantra”. A mantra is a short phrase, repeated constantly, that is supposed to bring spiritual benefit. It is never to be questioned. Western economists have a mantra just like this which they recite constantly: “economic growth”. They never question it and no-one points out to them that it is just a mantra.’ Eight years later, increasing numbers of people are starting to question the mantra. Let me quote Robert Devine from the dedication to his book The Sustainable Economy, ‘Given the number of people who are working so hard to create a sustainable, just and prosperous society, I like our chances.’

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1 The global economy is neither lifting the poor out of poverty nor developing the global south. Globalised debt-based capitalism has replaced colonialism as a way of enriching wealthy countries at the expense of poor countries.

2 Currency is created as debt chargeable to the issuing bank. Every English bank note states ‘I promise to pay the bearer’, signed by the chief cashier of the Bank of England.

3 Jeff Bezos started Amazon from his garage with a $300,000 investment from his parents. After 3 years he launched Amazon on the stock market but it took five years to make a profit. Bezos goes somewhat against the grain by reinvesting most of his profit back into the company rather than doling it out to his shareholders.

4 https://www.theguardian.com/sustainable-business/2015/feb/04/business-manifesto-sustainability-guidelines-climate-policy

5 In 2004, corporate lawyer Polly Higgins realised that the destruction of the biosphere can’t be halted as long as it remains legitimate. She worked tirelessly until her untimely death in 2019 to establish ecocide as an international crime under the Rome Statute. Such a crime would render CEOs and politicians liable to prosecution for causing or contributing to large-scale ecosystem destruction. Polly’s initiative is gaining traction, but it isn’t there yet and won’t be for some years.

6 The many-solutions problem. There’s a lot of alternatives to the growth model available, including Kate Raworth’s Doughnut Economics, Molly Scott Cato’s The Bioregional Economy, John Fullerton’s Regenerative Economics & Finance, Jason Hickel’s Less is More, Tim Jackson’s Prosperity Without Growth, Charles Eisenstein’s Sacred Economics, Herman Daley and Josh Farley’s Ecological Economics and Robert S. Devine’s The Sustainable Economy. The quantity of competing alternative models pretty much guarantees that none of them will push mainstream economics out of the nest. The alternative economists should get together and hammer out a single model that they can all agree on, then convince the academics at the LSE.